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U.S. Stock Prices Advanced Despite Election Uncertainty and Rising Coronavirus Cases

Market Data as of Week Ending 11/6/2020 unless noted otherwise.

EQUITIES
U.S. stock prices advanced despite election uncertainty and rising coronavirus cases throughout many parts of the country. Small and medium sized company stocks generally lagged large company peers, while growth stocks outperformed value. All major economic sectors were positive with the most notable gains in the information technology and health care sectors. Energy and defensive sectors such as utilities and real estate lagged the S&P 500 Index. Developed foreign stocks in Europe and Asia narrowly outperformed U.S stocks while Emerging Market stocks underperformed developed foreign markets.

BONDS
U.S. Treasury yields declined this past week as the Fed indicated that it could expand its purchases of long term government bonds. High yield corporate bonds were the top performing asset class and longer term bonds generally outperformed shorter term bonds. Investment grade corporate bonds are yielding approximately 2% and high yield corporate bonds are yielding more than 5%.

MACROECONOMIC DATA
Economic data released during the week was mostly positive and headlined by better than expected employment report. The U.S. reported an increase of 638,000 jobs in October and the unemployment rate declined to 6.9%, beating consensus expectations. Initial unemployment claims for the week were approximately 750,000 and less than 8 million Americans continue to claim ongoing unemployment benefits. Several indicators of economic activity have been trending higher. The Institute for Supply Management said its purchasing managers index (PMI) rose for the sixth consecutive month to 59.3 in October. IHS Markit reported that PMI for the eurozone advanced to 54.8 in October, the highest level in more than two years.

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